March arabica coffee (KCH26) today is up +7.40 (+2.00%), and January ICE robusta coffee (RMF26) is down -12 (-0.27%).

Coffee prices are mixed today.  Arabica coffee is moving higher today due to dryness concerns in Brazil after Somar Meteorologia reported that Brazil's largest arabica coffee-growing area, Minas Gerais, received 26.4 mm of rain during the week ended November 21, or 49% of the historical average.  

Robusta coffee is under pressure amid forecasts of drier weather in Vietnam.  Recent heavy rain has delayed harvesting in Vietnam's biggest coffee-growing province, Dak Lak, and drier weather will allow the resumption of the coffee harvest.

Last Friday, arabica coffee tumbled to a 7-week low after President Trump signed an executive order late Thursday exempting Brazilian food products from tariffs, including the 40% tariff on Brazilian coffee.

Shrinking ICE coffee inventories are also supportive of prices.  The US tariffs imposed on US coffee imports from Brazil have led to a sharp drawdown in ICE coffee inventories.  ICE-monitored arabica inventories fell to a 1.75-year low of 398,645 bags on Thursday, and ICE robusta coffee inventories fell to a 4.5-month low of 5,370 lots today.  American buyers are voiding new contracts for Brazilian coffee purchases due to the tariffs on US imports from Brazil, thereby tightening US supplies, as about a third of America's unroasted coffee comes from Brazil.  US purchases of Brazilian coffee from August through October, during which President Trump's tariffs took effect, dropped by 52% from the same period last year to 983,970 bags.

In a bearish factor, StoneX forecast last Wednesday that Brazil will produce 70.7 million bags of coffee in the new 2026/27 marketing year, including 47.2 million bags of arabica, a +29% y/y increase.

Increased Vietnamese coffee supplies are bearish for prices.  On November 6, the Vietnam National Statistics Office reported that Vietnam's Jan-Oct 2025 coffee exports rose +13.4% y/y to 1.31 MMT.  Also, Vietnam's 2025/26 coffee production is projected to climb +6% y/y to 1.76 MMT, or 29.4 million bags, a 4-year high.  In addition, the Vietnam Coffee and Cocoa Association (Vicofa) said on October 24 that Vietnam's coffee output in 2025/26 will be 10% higher than the previous crop year if weather conditions remain favorable.   Vietnam is the world's largest producer of robusta coffee.

Signs of tighter global coffee supplies are supportive of prices, as the International Coffee Organization (ICO) on November 7 reported that global coffee exports for the current marketing year (Oct-Sep) fell 0.3% y/y to 138.658 million bags.

Coffee prices found support after Conab, Brazil's crop forecasting agency, cut its Brazil 2025 arabica coffee crop estimate on September 4 by -4.9% to 35.2 million bags from a May forecast of 37.0 million bags.  Conab also reduced its total Brazil 2025 coffee production estimate by 0.9% to 55.2 million bags, from a May estimate of 55.7 million bags.

The USDA's Foreign Agriculture Service (FAS) projected on June 25 that world coffee production in 2025/26 will increase by +2.5% y/y to a record 178.68 million bags, with a -1.7% decrease in arabica production to 97.022 million bags and a +7.9% increase in robusta production to 81.658 million bags.  FAS forecasted that Brazil's 2025/26 coffee production will increase by +0.5% y/y to 65 million bags and that Vietnam's 2025/26 coffee output will rise by 6.9% y/y to a 4-year high of 31 million bags.  FAS forecasts that 2025/26 ending stocks will climb by +4.9% to 22.819 million bags from 21.752 million bags in 2024/25.
 

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